Citation Nr: 9906586
Decision Date: 03/11/99 Archive Date: 03/18/99
DOCKET NO. 92-11 561 ) DATE
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On appeal from the
Department of Veterans Affairs Regional Office in San Juan,
Puerto Rico
THE ISSUE
Entitlement to waiver of recovery of an overpayment of
improved pension benefits in the calculated amount of $530,
to include the issue of whether the overpayment was due
solely to administrative error on the part of the Department
of Veterans Affairs (VA).
REPRESENTATION
Appellant represented by: Disabled American Veterans
ATTORNEY FOR THE BOARD
C. Hickey, Counsel
INTRODUCTION
The veteran had active service from May 1953 to April 1955.
This appeal to the Board of Veterans' Appeals (Board) arises
from the September 1991 decision of the Committee on Waivers
and Compromises (Committee) of the Department of Veterans
Affairs (VA) Regional Office (RO), which denied the veteran's
claim seeking waiver of recovery of an overpayment of
improved pension benefits.
The case was previously before the Board in May 1994 and
April 1996 when it was remanded for further development, to
include adjudication of the issue of whether the overpayment
was due solely to administrative error on the part of VA.
FINDINGS OF FACT
1. All relevant evidence necessary for an equitable
disposition of the veteran's claim for waiver of recovery of
the overpayment has been obtained by the RO.
2. The veteran has been in receipt of improved pension
benefits, effective since September 1988.
3. Received in October 1989 was the veteran's Eligibility
Verification Report (EVR) reflecting monthly income of
$395.25, in benefits from the Social Security Administration
(SSA).
4. Received in December 1990 was the veteran's EVR
reflecting monthly income of $450.00, in benefits from the
SSA.
5. In January 1991 the veteran was asked to provide
verification of his income, to include all changes in the
level of income over the reporting period reflected in his
December 1990 EVR.
6. Received from the veteran in January 1991 was a Form SSA-
1099, Social Security Benefit Statement, indicating total
benefits of $5,379.20 for 1990, which reflected an increase,
prior to December 1990, in the amount of income from SSA
benefits as reported by the veteran in his October 1989 EVR.
7. In June 1991 the veteran was notified by the RO of
reductions in his improved pension benefits effective October
1989, based on unreported Social Security benefits in excess
of the amount indicated on his October 1989 EVR; the
reductions created an overpayment calculated by the RO in the
amount of $530.
8. There is no indication of fraud, misrepresentation, or
bad faith by the veteran.
9. The veteran was solely at fault for the creation of the
overpayment, because he failed to promptly report the full
amount of his income from Social Security benefits to VA.
10. VA was not solely at fault in the creation of the
overpayment, inasmuch as the RO relied on income information
reported by the veteran himself and promptly amended the rate
of pension benefits upon learning of increased countable
income attributable to the veteran.
11. Recovery of the overpayment of improved pension benefits
would tend to deprive the veteran and his family of the
ability to provide for life's basic necessities, thereby
defeating the purpose of the benefit.
12. Failure to recover the overpayment would not result in
unjust enrichment of the veteran.
13. It has not been alleged nor shown that reliance on the
appellant's pension benefits resulted in relinquishment of a
valuable right or the incurrence of a legal obligation.
CONCLUSION OF LAW
The overpayment was not the result of an erroneous award
based solely on administrative error; recovery of the
overpayment would not be against equity and good conscience.
38 U.S.C.A. §§ 5107, 5112, 5302 (West 1991); 38 C.F.R.
§§ 1.963, 1.965, 3.500, 3.501 (1998).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
At the outset, the Board finds that the veteran has met his
burden of submitting evidence sufficient to justify a belief
by a fair and impartial individual that his claim is well-
grounded; that is, the claim is plausible. Additionally,
there is no indication that there are unobtained records
which are available and which would aid a decision in this
case. Accordingly, we conclude that the record is complete
and that there is no further duty to assist the veteran in
developing the claim, as mandated by 38 U.S.C.A. § 5107(a).
A veteran who served in the active military service for 90
days or more during a period of war, who is permanently and
totally disabled from non- service-connected disability not
the result of the veteran's own willful misconduct, is
entitled to pension payable at the rate established by law,
reduced by the veteran's countable annual income from all
sources, including Social Security benefits. 38 U.S.C.A.
§ 1521(a), (c), and (j) (West 1991); 38 C.F.R. § 3.271
(1998).
The veteran has been in receipt of improved pension benefits,
effective since September 1988. In his application for
pension in October 1988 the veteran reported monthly income
of $383 in benefits from the SSA. In May 1989 pension
benefits were awarded based upon the income reported. At
that time, and on subsequent occasions, the veteran was
advised that the amount of pension awarded to him was
determined by his countable family income, and he was
notified of his obligation to immediately report any increase
in income to VA. The veteran was also required to submit an
annual Eligibility Verification Report (EVR) reflecting
income, assets, and expenses. Received in October 1989 was
the veteran's EVR reflecting his reported monthly income,
other than VA pension, of $395.25, in benefits from the SSA.
The EVR received in December 1990 indicated that his monthly
income from SSA benefits was $450.00. In January 1991 the RO
asked the veteran to provide verification of his income, to
include all changes in the level of income during the
reporting period reflected in his last EVR. In response, the
veteran forwarded to VA a Form SSA-1099, Social Security
Benefit Statement, indicating he had received benefits
totaling $5,379.20 in 1990. That figure reflected an
increase, prior to December 1990, in the level of monthly
Social Security income compared to the level reported by the
veteran in his October 1989 EVR.
In June 1991 the veteran was notified by the RO of
retroactive reductions in his improved pension benefits
effective October 1989, based on the evidence that during the
pertinent period he had been in receipt of Social Security
benefits in excess of the amount reported on his October 1989
EVR, but had not reported any increase until December 1990.
The retroactive adjustments resulted in an overpayment
calculated by the RO in the amount of $530. In July 1991 the
veteran requested waiver of the overpayment which was denied
by the Committee on Waivers and Compromises (Committee) in
September 1991. The decision of the Committee reflects their
determinations that there was no evidence of fraud,
misrepresentation, or bad faith, and that the overpayment was
solely the fault of the veteran, who had received excessive
benefits based on his inaccurate report of income. It was
also found that there was no evidence that recovery of the
debt would not create financial hardship or defeat the
purpose of the benefit.
Pursuant to 38 U.S.C.A. § 5302(a), a finding of fraud,
misrepresentation, or bad faith will preclude a grant of
waiver of recovery of an overpayment. Inasmuch as the
Committee has determined that the appellant is free of fraud,
misrepresentation, or bad faith, the current review is
limited to the issue of whether the evidence establishes that
recovery of the indebtedness would be against equity and good
conscience, in which case recovery of that overpayment may be
waived. 38 U.S.C.A. § 5302; 38 C.F.R. §§ 1.963, 1.965.
The Board finds, after reviewing the facts and circumstances
of this case, that there is no indication of fraud,
misrepresentation or bad faith on the part of the appellant
in the creation of the overpayment. This does not mean that
he may not be found at fault in its creation, but merely
indicates that the acts which led to its creation do not meet
the high degree of impropriety as to constitute fraud,
misrepresentation or bad faith. See 38 C.F.R. § 1.965(b)
(1998).
The equity and good conscience standard means arriving at a
fair decision between the obligor and the Government. In
making this decision, consideration is given to the following
elements which are not intended to be all inclusive:
1. Fault of the debtor. Whether the
actions of the debtor contributed to the
creation of the debt.
2. Balancing of faults. Weighing of the
fault of the debtor against that of the
VA.
3. Undue hardship. Whether collection
would deprive the debtor or family of
basic necessities.
4. Defeat the purpose. Whether
withholding of benefits or recovery would
nullify the objective for which benefits
were intended.
5. Unjust enrichment. Whether failure
to make restitution would result in
unfair gain to the debtor.
6. Changing position to one's detriment.
Whether reliance on VA benefits resulted
in relinquishment of a valuable right or
the incurrence of a legal obligation. 38
C.F.R. § 1.965(a).
The record in this case indicates that the overpayment at
issue resulted from the retroactive adjustment of the
appellant's improved pension award due to additional
countable income in SSA benefits which was previously
unreported. The veteran does not contest that an overpayment
has been received. Nor does he dispute the amount of the
debt charged against him. Rather, the veteran contends that
the overpayment was created solely as a result of
administrative error on the part of VA. He emphasizes that
he reported an increase in the rate of his SSA benefits in
each of the two EVRs he submitted during the pertinent
period.
Although the veteran's EVRs reflect increasing amounts of
income from SSA, the SSA income report which he provided to
VA shows the veteran did not advise VA of his current up-to-
date income in a timely manner, as he was required to do. If
the veteran had promptly, and accurately reported all income,
the RO would have been able to calculate his countable income
and corresponding rate of benefits, correctly, thus
preventing the creation of the overpayment at issue.
Sole administrative error, as asserted by the veteran,
connotes that he neither had knowledge of, nor should have
been aware of the erroneous award, and that neither the
veteran's actions nor his failure to act must have
contributed to payment pursuant to the erroneous award. 38
U.S.C.A. § 5112(b)(8); 38 C.F.R. § 3.500(b)(2). The
effective date of reduction or discontinuance of an award,
based solely on administrative error or error in judgment, is
the date of the last payment of the erroneous award. 38
U.S.C.A. § 5112(b)(10) (West 1991); 38 C.F.R. § 3.500(b)(2)
(1997). Thus, if the debt was the result solely of
administrative error, there would be no overpayment charged
to the veteran. In order for the Board to make such a
determination, that the overpayment was not properly created,
it must be established that the action of the VA was the only
reason for the overpayment.
The evidence indicates that the overpayment in this case was
created because the veteran failed to promptly report the
full amount of his Social Security benefits to the RO. The
veteran's failure to keep the RO appraised of his countable
income, resulted in his receipt of excessive amounts of
benefits to which he was not entitled. It appears from the
evidence, which has been described in detail above, that the
appellant was receiving additional amounts of SSA benefits
between October 1989 and December 1990 that were not reported
to VA. Due to the appellant's failure to timely and
accurately report the amount of Social Security benefits, an
overpayment of pension resulted. Based on a review of the
entire record and having considered the contentions of the
veteran, the Board concludes that the veteran was solely at
fault in the creation of the debt; conversely, VA bears no
fault in the creation of the overpayment as the veteran's
pension benefits were promptly adjusted by VA upon receipt of
notice of the previously unreported income. In this regard
the Board emphasizes that it was the appellant, not VA, who
possessed the individual knowledge of his finances.
Thus, the evidence in this case fails to support a conclusion
that the overpayment was due solely to error on the part of
the VA. Inasmuch as the record shows that the disbursement
of excessive pension benefits to the veteran was due to the
appellant's actions in failing to keep VA appraised of his
financial circumstances, the preponderance of the evidence is
against the claim that the overpayment at issue arose solely
as a result of administrative error on the part of the VA.
The Board concludes that overpayment was not solely
attributable to VA error, and was properly charged to the
veteran. 38 U.S.C.A. §§ 5107, 5112 (b)(2) (West 1991); 38
C.F.R. §§ 3.500, 3.501 (1998).
The Board does note that the absence of any evidence that the
veteran deliberately misled the RO with regard to the extent
of his income weighs in his favor. His fault was apparently
one of negligence or tardiness, rather than deceit.
The veteran also argues that recovery of the overpayment
would result in financial hardship. With respect to the
claim of undue hardship, equitable principles require that
the Board analyze the veteran's financial status and the
potential impact of repayment on his ability to provide
himself and his family with the basic necessities of life,
thereby defeating the purpose for which the benefits were
intended. In this inquiry the Board will rely upon the
Financial Status Reports (FSR) received in March 1994 and
March 1995, which indicate the veteran's monthly income was
derived from Social Security benefits and VA pension only.
The veteran reported total assets reflecting the combined
value of household goods and furnishings, and a 1987
automobile. There is no evidence of savings. Total monthly
expenses, reflected reasonable amounts for necessities, to
include food, rent, utilities, insurance, clothing and
medical care, as well as regular payments due on consumer
debts. On each of the EVRs, monthly expenses exceeded income
by at least $200.
In view of the foregoing, the Board finds it has been shown
that financial hardship would tend to result upon recovery of
the overpayment, and withholding some of the veteran's
pension to repay the debt would appear to defeat the purpose
for which the benefits are intended.
Also for consideration is the question of whether the veteran
would enjoy an unfair gain if waiver was granted for the
additional benefits he received during the period at issue.
The record does show that VA made erroneous payments of
benefits based on incorrect income information which the
veteran reported, and he, in turn, benefited. However, the
Board finds that in the circumstances of this case, to
include the veteran's current financial status, and the
relatively modest amount of overpayment, failure to make
restitution of the full amount of the debt would not
necessarily result in unjust enrichment of the veteran.
With regard to the final element of the standard of equity
and good practice, it has neither been alleged nor shown that
reliance on the appellant's compensation benefits resulted in
relinquishment of a valuable right or the incurrence of a
legal obligation. Moreover, while acknowledging that the
elements addressed above are not all inclusive, there is no
additional evidence in the record for the Board to consider
under the equity and good conscience standard which would
impact on this decision.
In sum, it appears that the factors to be considered in
determining whether recovery of the overpayment would be
against equity and good conscience support the veteran's
claim for waiver. The veteran was solely at fault in the
creation of the overpayment by failing to promptly and
accurately report increases in his income. However, the
fault is mitigated to a minimal degree by the absence of
evidence of intentional deceit. Additionally, the record
indicates that recovery of the overpayment would tend to
deprive the veteran of life's basic necessities, thus
defeating the intended purpose of the benefit. It is not
demonstrated that waiver of the debt would result in unjust
enrichment. Accordingly, the Board finds that the evidence
supporting waiver is at least in equipoise with
countervailing evidence in this case. It is therefore
determined that recovery of the overpayment of improved
pension benefits in the amount of $530 would not be contrary
to the standard of equity and good conscience in the
circumstances of this case, and should be granted.
ORDER
Waiver of recovery of the overpayment of improved pension
benefits is granted.
N. R. Robin
Member, Board of Veterans' Appeals
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